Experts worried about Russia

With the United States clearly in a recession, Latin America sliding into adeep crisis and Asia feeling the jitters of a global crisis, Russia stillstands out on the world economic scene as nearly a success story. Thecountry is paying off its foreign debt on time, plans no new foreignborrowings next year and still expects the economy to grow this year around4 percent.But not everything is so bright, economists are saying, pointing to theslowing growth, declining investments and the first signs of fiscalproblems. The cure is deeper and faster reform, they say. But with loomingparliamentarian and presidential elections in 2003 and 2004 respectively,it appears that there is lack of political will to make the painfuldecisions needed to push the reforms forward."The number of warning lights that have started flashing in the lastseveral months is concerning, despite the apparent health of the basicratios," Roland Nash, head of research with Renaissance Capital investmentbank, said commenting on Russia's latest macroeconomic figures. "Industrialproduction growth has fallen from 5.5 percent in the first half of 2001 to3.1 percent in the first half of 2002. While recovery in the service sectorhas partly disguised this in the GDP figures, headline growth is down to3.7 percent in the first half of 2002 from 5.3 percent last year."Reforms have begun in key areas including tax, the natural monopolies,land, labor market and deregulation of economy, but the results may fail toimpress, the Russia Journal quoted analysts as saying..